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Lobbyists must pay careful attention to new rulest

Passing H.R. 2316 and amending the Lobbying Disclosure Act of 1995 (LDA), the House of Representatives was responding to continued concerns about the corrupting influences of lobbyists such as the now-infamous Jack Abramoff. Little attention has been paid, however, to provisions of H.R. 2316 and its Senate companion, S. 1, that would transform the LDA from a system of disclosure into a criminal statute that would impose the gift and travel rules of the House and Senate onto anyone registered under the LDA.

The gift and travel rules of the House and Senate regulate the activities of members and staff. (Of course, prosecutors can and have used violations of the gift rules as the basis for prosecution of lobbyists.) Changes to the LDA as proposed in the House and Senate bills, however, would make it a federal crime for a lobbyist to violate House and Senate gift rules. It does this in several ways. As a predicate, in addition to increasing the maximum civil penalties for LDA non-compliance (the Senate increases the penalty to $200,000; the House version to $100,000), both the House and Senate bills would subject those who “knowingly and corruptly” fail to comply with the provisions of the LDA to criminal penalties, with a maximum 10-year term of imprisonment under the Senate bill, five years under the House bill.

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With violations of the LDA now a federal crime, the authors of the House and Senate bills also added substantive regulatory provisions to the LDA that would bring lobbyists under the gift rules of the House and Senate. Both the Senate and House bills prohibit lobbyists from “mak[ing] a gift or provid[ing] travel” if the lobbyist has knowledge that the gift or travel may not be accepted under the rules of the House or Senate. There is a requirement that each LDA report contain a certification that every lobbyist covered under that report has not “provided, requested or directed” a gift, including travel, in violation of the House and Senate ethics rules. Through these provisions, rules that once applied to members and staff now apply to lobbyists, with the responsibility for prosecution falling to federal prosecutors. The new provisions will add to a prosecutor’s existing arsenal that now includes the bribery and gratuity statutes.

Moreover, and contrary to what some believe, the “knowingly and corruptly” standard will not restrict prosecutions to only the most egregious violators. Criminal investigations arising under the provisions would have a direct impact for members: For example, many provisions of the House and Senate gift rules, such as the travel rules, require members to make a determination of whether acceptance of a gift is appropriate. In such instances, a prosecutor would need to know what a member was thinking when he or she accepted a gift in order in order to assess the merits of a potential violation. And, while a member would not be prosecuted under the LDA, he or she, now caught in the crosshairs of a prosecutor, could be subject to his own federal investigation.

It already is a crime to knowingly report false information on LDA forms. What will be the real impact of the changes? Will they cause some individuals to terminate their registrations, thus removing themselves from these new restrictions, obligations and penalties? For example, a lobbyist in a larger organization who is already registered could decide no longer to make lobbying contacts and, after a requisite period, terminate his registrations. Or others in such organizations who are new to the lobbying industry may attempt to avoid registration altogether by not making lobbying contacts (but still engage in lobbying activities). These individuals would still be subject to the restrictions of the gift and travel bans that apply to entities that employ or retain lobbyists. It would, however, allow non-registrants to raise money for members for the benefit of their client(s) without having to disclose those activities in LDA reports. It would also eliminate the certification requirement of gift rule compliance and remove the statutory requirement to comply with the House and Senate gift and travel rules.

These would not be individuals who plan to violate the gift and travel rules and therefore seek to be outside of the scope of the statute. Rather, some lobbyists may well believe that it’s not worth the possibility of being under the microscope of the government.

Will these changes modify behavior or only motivate individuals to find ways to continue their practices, such as fundraising, differently? As is often the case, whenever attempts are made to change the behavior of individuals through new laws or regulations, it’s not too long before some find ways around them.

Tom Spulak is a King & Spalding partner in the Government Advocacy and Public Policy Practice Group. He served as Democratic staff director and general counsel of the House Committee on Rules, and as general counsel to the House.